Gold Traded Flat In International Market; Dollar Strength Took XAU-AUD Up On Charts

  • May 23, 2019 AEST
  • Team Kalkine
Gold Traded Flat In International Market; Dollar Strength Took XAU-AUD Up On Charts

Gold prices traded flat during the morning session today post the Federal Reserve monetary policy meeting.

The Gold Spot traded flat in a thin range of US$ 1272.90 to US$ 1276.44 as the United States Federal Reserve policymakers mentioned that the patient approach (with regards to interest rates) adopted by the FED over the monetary policy action could stay for some time in the market.

In the absence of speculation of future interest rate in the global market and any other price driving event, gold prices traded flat.

The gold prices fell previously over the dollar bull run with the resurgence of trade tiff between the US and China; the dollar prices surged in the international market, which in turn, exerted pressure on cross currency pairs.

Gold prices in Australia further inched up in the domestic market as the US dollar sustained its bull rally, which in turn, depreciated the Australian dollar.

Dollar Index further inched up from the level of 97.89 (Day’s low on 22nd May 2019) to the present high of 98.26 (as on 23rd May 2019 AEST 6:06 PM), which in turn, pulled the Australian gold prices up on Charts.

The Australian gold prices increased from the level of A$ 1839.03 (Day’s low on 20th May 2019) to the level of A$1858.07 (Day’s high on 21st May 2019), and the prices are hovering around A$1858 from yesterday (22 May 2019)

Australian Gold Technical Outlook:

Source: Thomson Reuters; XAU/AUD Daily Chart

On following the daily chart of XAU-AUD, it can be seen that the prices of gold in Australia are moving in a continuous uptrend from the level of approx. A$ 1653.55. After giving the initial golden cross over (marked as circle 1) of 7 and 20-days exponential moving averages (EMAs) around the level of approx. A$ 1685, the prices rose significantly to mark the level of A$ 1894.26. The prices corrected by more than 50% until approx. A$ 1733 before resuming the initial rally, shown on the chart with an upward sloping yellow trendline.

The wave 1 (pink-dotted line), which joined the previous initial rally ended at approx. A$1880 and corrected again to mark a correction wave (marked as 2 on the chart). The primary uprise (wave 1) and a secondary correction (wave 2) gave us perfect coordinates to join the high of the wave 1 to the low of wave 2 though Fibonacci Extensions.

The results of Fibonacci Extensions are as 23.6% (A$ 1863.79), 38.2% (A$ 1880.14), 50.0% (A$ 1893.35), 61.8% (A$ 1906.56), 100.0% (A$ 1949.33).

On the chart, the prices again marked a golden cross-over of 7 and 20-days EMAs (denoted by a green contour).

Source: Thomson Reuters; XAUAUD Daily Chart

In a nutshell, the gold spot denominated in the U.S. dollar is trading flat, however, the strength in the dollar is depreciating the value of Australian dollar, which in turn is supporting the prices of the Australian gold. And, the Australian gold is continuing its initial uptrend and inching up.


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